Central Garden Pet 2025 Q4 Earnings Sharp Loss Reduction and EPS Improvement

Central Garden & Pet (CENT) reported fiscal 2025 Q4 earnings on Nov 26, 2025, exceeding revenue expectations with a 1.3% year-over-year increase to $678.18 million. The company narrowed its net loss to $-10.44 million (69.7% improvement) and reduced per-share losses to $0.16 (69.3% improvement). Guidance for fiscal 2026 non-GAAP EPS of $2.70 or better reflects margin expansion and operational efficiency.

Revenue

Total revenue rose 1.3% to $678.18 million in Q4 2025, driven by the Garden segment’s $250 million in sales, a 7% increase from $234 million in Q4 2024. Meanwhile, the Pet segment declined to $428 million from $435 million, impacted by UK operations closure and reduced durable sales. Strategic portfolio optimization and cost discipline underpinned the Garden segment’s growth, while the Pet segment faced headwinds from SKU rationalization and market dynamics.

Earnings/Net Income

The company’s net loss narrowed to $-10.44 million, a 69.7% reduction from $-34.40 million in Q4 2024, with EPS improving to $-0.16 from $-0.52. This marked a significant turnaround, driven by margin expansion, operational efficiency, and cost reductions. The earnings improvement highlights the effectiveness of the “Cost and Simplicity” agenda, though challenges like variable weather and durable product exits remain.

Post-Earnings Price Action Review

The strategy of buying CENT when earnings beat and holding for 30 days delivered moderate performance but underperformed the benchmark. The strategy achieved a 35.09% return, while the benchmark returned 83.07%, resulting in an excess return of -47.98%. The Sharpe ratio was 0.19, indicating modest risk-adjusted returns. With a maximum drawdown of 0% and a volatility of 33.04%, the strategy had limited downside risk but lacked the potential for significant gains compared to the benchmark.

CEO Commentary

CEO Nicholas Lahanas emphasized fiscal 2025 achievements, including record EBITDA, EPS, and gross margins, driven by operational rigor and portfolio optimization. Strategic priorities for fiscal 2026 include accelerating the Central to Home strategy, leveraging AI-ready data, and investing in innovation (e.g., wild bird feed, Farnam Endure). Lahanas expressed optimism about fiscal 2026, citing strong balance sheet flexibility, margin expansion, and confidence in retail partnerships.

Guidance

Central Garden & Pet guided to fiscal 2026 non-GAAP EPS of $2.70 or better, driven by margin expansion and operational efficiency. Quantitative targets include $50–60 million in CapEx for productivity initiatives and Q1 2026 non-GAAP EPS of $0.10–$0.15. The company aims to maintain leverage below 3x and prioritize operational agility to offset macroeconomic and weather-related uncertainties.

Additional News

Recent developments include Canaccord Genuity reiterating a Buy rating with a $50.00 price target, citing the company’s structural profitability and margin improvements. Post-quarter, Central Garden & Pet repurchased $18 million in stock, signaling management’s confidence in future prospects. The CEO highlighted strategic priorities such as AI-ready data and innovation in wild bird feed and Farnam Endure, while CFO Brad Smith outlined plans to offset $20 million in annual tariff exposure through pricing and supply chain actions.

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